I get really annoyed when I see people throwing rubbish on the floor or cannot be bothered to stop and think before placing the material on the correct recycling bin.

But there is a good explanation for that. In Brazil, the ordinary citizen do not see the benefit of recycling beyond the social aspects associated with the waste pickers and cooperatives. They do not see the value of waste segregation and the important role they have in transforming waste into a new material.

The industry do not promote products with recycled content as the general perception is that products made out of recycled material are low quality products. In addition to that, there are no incentives given by the government to facilitate the use of recycled material and there is no awareness campaigns to demonstrate the value of recycling in terms of generating new jobs, reducing pollution and associated costs with city cleaning and health treatment.

If people don’t see the value and the benefit for them, the status quo will not be changed.

So, how can we change the status quo, demonstrate value in a different way and influence new habits? Shadow pricing!

“Shadow Pricing” is used to refer to monetary values assigned to currently unknowable or difficult to calculate costs or where price does not reflect the actual value of a good or no market value for a good or commodity exists…my friend that worked in the financial market explained to me.

Therefore, I have returned to the MIT Climate CoLab and developed another project proposal hoping to discuss the idea in such a high profile and expert based collaborative platform and bring this idea forward. The suggested shadow pricing should incorporate government costs from different areas that could be avoided by improving city waste management conditions. If the government is able to see its expenditure from all different areas in a joint model and how they connect with each other, a new economic model can be developed that contribute to better use of public funds, conserve local resources, generate costs savings and improve quality of life.

The next step if to work further on the methodology for calculating the shadow price. Anyone up for the challenge??

MIT feedback:

“ The concept could radically change the way we view waste streams and can intrinsically add value to potential future waste, thus leading to a reducing in material being sent to the landfill.”

“The concept is potentially attractive and could have a strong impact on waste recycling.”

“One of the merits of the proposal is its ability to gather and make available relevant information that could bring about a change in the status quo institutional and regulatory approach towards recycling in a country in which the vast majority of its municipalities where recycling habits are not pervasive.”

Not a bad start of an idea to persuade change through an economic mechanism. methodology for calculation has to be defined and a model for its would be implemented.